Things To Consider When Purchasing New Equipment

For most construction and industrial companies, buying new equipment is one of their largest costs. Although equipment is necessary in order to continue operating efficiently and growing a construction business, purchasing new equipment often requires a significant amount of capital. This can make it difficult for companies to stay within their budget. 

When it comes time to buy new equipment for your company, there are some things to consider. Here are ways to evaluate which direction to take when looking to buy new or used equipment

Consider your short and long term equipment needs

When it’s time to purchase new equipment, the first thing to consider are your short and long term equipment needs. Is your company currently growing? Do you predict this growth to continue over several years? Are you taking on a new project or a new job type? These are some questions to ask yourself to determine the best way to acquire your equipment. 

When acquiring new equipment for your company, you have many different choices, including: purchasing new, purchasing used, leasing and renting. Assessing your short and long term equipment needs can help you determine which acquisition method to choose.

For example, if your company is currently growing, and you are projecting this growth to continue over the next several years, then buying new or used equipment could be the better option. By owning the equipment, you are able to take on more jobs over the long-term and grow your business. Owning equipment also adds value to your business, growing your equity over time. 

If you are taking on a new job that requires a certain type of equipment that you don’t typically use, leasing or renting could  be a better choice. Leasing or renting equipment allows you to acquire the type of equipment you need for the short-term, especially for specific projects that require equipment that you don’t already own or will no longer need once the project is complete. Choosing a lease or rental can help preserve capital and establish the monthly expenses for the equipment. 

Consider new vs. used equipment

Engineering, industrial and construction costs have seen a huge increase in the past year, and experts are predicting these rising costs to continue well into the future. Included in these price increases are equipment costs. When looking to purchase new equipment, you may notice that there is more used equipment available right now than new. This is due to shortages of parts on newer machines, where there isn’t as much of a shortage for used parts. This has compelled many companies to start looking into purchasing used equipment, which can be  slightly less expensive than buying new. 

You should also keep in mind the quality, existing use and technology of the equipment you are looking to purchase, and make sure whatever you choose is going to fit into your needs now and in the future.

Consider financing options

When it comes to acquiring new equipment for your company, paying cash upfront is not your only option. In fact, there are many different used construction equipment financing options you can choose from. Equipment financing is a great option if you’re looking for a small business loan because, at Equify, the equipment you own serves as collateral. Used construction equipment financing lets you purchase or lease the equipment you need, while not having to sacrifice your cash flow, ultimately allowing you to continue moving your company forward. 

Contact Equify Financial

If you are in the market of buying equipment for your business, it’s important that you are aware of all the financing options available. Give one of our specialists a call today to learn more.